A Federal court in Miami will decide today in a court hearing whether to approve the $410 million class action lawsuit against Bank of America over its overdraft fee policy.
The lawsuit claimed that Bank of America processed its debit card and check payments in a way that triggered more overdrafts, and therefore more fees, by paying larger items first then smaller ones. The average consumer has, by far, many more smaller transactions than larger ones and by paying the higher ones first, it would often overdraft a customer's account. The many smaller transactions could then be subsequently charged, incurring more overdraft fees, instead of paying the smaller ones first, resulting in fewer, or possibly just one overdraft fee.
In the deal originally made in May, BofA admitted no wrong doing. The lawsuit covers BofA debit cardholders from 2001 to 2011.
New financial regulation as part of the overall financial reform laws now prohibit this type of processing.